Trump Bump US indices hit intra day record highs again

All three major US indices began the session at intra-day record highs as the Trump trade is well and truly back on. US equity markets had spent much of the week desperately searching for direction and yesterday afternoon Trump provided that much need direction by announcing that phenomenal tax reforms will come in the next two – three weeks.

This announcement came after a meeting with the CEO’s from America’s biggest airlines where Trump vowed to protect national airlines in the face of subsidised foreign competition and address tax and regulation. Whilst the share price of American Airlines has jumped almost 4% in early trading movement into other airlines, such as Delta Airlines and SouthWest Airlines has been less enthusiastic, which could be down to Trump’s travel ban weighing on sentiment.

Financial continue to rally on Trump’s pledge

Financials on the other hand picked up immediately after Trump’s tax reform pledge and have continued to rally in the current session, albeit at a more modest pace. We expect financials to remain on the front foot in the short term as the Trump trade resurges and as long as Trump doesn’t disappoint with the tax reform then there could be further upside here.

That said given the short amount of time that Trump has been in office and the timeframe of 2- 3 weeks, it is doubtful how much tangible reform will come through, leaving a market high on optimism liable to a pullback. Goldman Sachs is 37% higher since Trump won the elections, a long way to fall should Trump not meet expectations with his pro-business policies,

Energy sector rounds the week off flat

Despite significant volatility in the energy sector, it is looking to be rounding the week off more or less where it began. Whilst the beginning of the week was plagued by low crude oil prices, after data showing a huge increase in US oil inventors, the second half of the week has seen a recovery in the price of oil and consequently energy stocks rebound. OPEC has confirmed a 90% adherence to the agreed oil production cut which has calmed market nerves that big player may opt to ignore the limits. The energy sector is the biggest sectorial riser on the S&P on the day, jumping 1.6%, however across the week is currently down 0.05%.  Exonn mobile is trading up 0.66%.